Since the Central Bank of Ireland introduced new changes to the mortgage lending market, it is fair to say there has been an overall significant impact on the ability of borrowers to borrow. As of November 2016 new changes to the regime have improved the situation somewhat for first time buyers, however the house mover or non first-time buyer continue to have significant restrictions placed upon them. Below are some examples of how the lending restrictions may impact on your ability to borrow and thence your ability to purchase a new home:
- CASE 1 – First Time Buyer – Property value: €200,000.
Deposit required: €20,000.
Mortgage Lending: €180,000.
Therefore typical monthly repayments @ 3.6% over 30 years: €898.
- CASE 2 – First time buyer – Property Value: €300,000.
*10% on full amount. (no longer restricted to first €220,000)
Total deposit required: €30,000.(Not €37,500 as previous)
Maximum loan: €262,500.
Therefore typical monthly repayments @3.6% over 30 years: €1,347.
- CASE 3 – Trading up – Property value: €400,000.
Deposit Required: €80,000.
Required mortgage lending: €320,000.
Therefore typical monthly repayments @ 3.6% APR over 30 years: €1,796
Note: The above illustrations are for information purposes only however in certain circumstances exceptions are made. In each instance this is subject to underwriting and the particulars of each case.
In conclusion therefore, impartial financial advice is invaluable even if you are only considering getting a mortgage. Be prepared and it’s half the battle!
The interest rate quoted is for illustration purposes only and are indicative of rates in the market as of 01/12/15 (source BestAdvice.ie)
Warning: Interest rates can rise as well as fall.
Warning: If you not keep up repayments you may lose your home.